Determine the current profit per pound of air express
Econometrics
Air Express, an overnight mail carrier, provides one flight per day from Portland, Maine to Hawaii. Currently Air Express flights have been operating at 80% capacity (maximum capacity 400 pounds). Therefore each flight has the potential to carry 80 additional pounds of mail. You have been retained by Express to provide them with the lowest price per pound they could charge for each of the 80 pounds of unused capacity without reducing their current level of profits. You are also asked to determine their current profit per pound? State your answers per pound. Your analysis, to date, has shown the following:
P = 82 – .25q (demand equation) where P is the price Express charges to deliver a pound of mail and q represents a pound of mail.
TC = .00025q2 +q + 300
MC = .0005q + 1
MR = 82 – .5q
